Reps and Certs
As you may know, the Representations and Certifications phase of the Federal contracting process, often expressed as simply ‘Reps and Certs,’ has been making a few headlines recently. In the past few months the Wall Street Journal, the New York Times, and other publications have documented several cases of companies repaying the government for entering into contracts for which they did not qualify. These reports of companies abusing federal programs designed to channel government business toward specific classes of small and/or disadvantaged firms have highlighted the importance of the Reps and Certs process. This spotlight on the issue has also served to amplify the scrutiny under which firms’ claims are verified.
Agencies involved in the government contracting process require candidate firms to disclose relevant information during the Reps and Certs phase of contracting. Information such as number of employees, average annual receipts, corporate affiliations, etc., help to determine the character of the organization and what assistance programs it might qualify for.
Agencies like the Small Business Administration (SBA) have vastly improved their efforts to verify that the Reps and Certs a contracting firm claims are factual. As the news would indicate, some companies are representing themselves to the government in manners that are inconsistent with reality. The responsibility of monitoring these programs, and ensuring that they are available for the companies they are intended to benefit, falls to the government agencies involved in contracting.
To this end, in the 2010 fiscal year the SBA visited more than 1,000 small business contractors in their HUB Zone program alone. This is up from fewer than 100 two years ago and just seven in the first half of 2009. This large-scale audit detected some of the fraud making the headlines. The Government Accountability Office has also become engaged in this effort. The GAO has determined that individual contracts worth up to a few billion dollars each may have been awarded to fraudulent businesses.
Obviously a company should never overtly lie or misrepresent themselves to the government in any way during any exchange of information. This, as we are witnessing, will result in penalization, which in some cases can be severe. For firms entering contracts in good faith, the challenge becomes ensuring the timeliness of the information on record.
Federal Acquisition Regulation 4.1201 policy states, “contractors shall update the representations and certifications submitted to ORCA as necessary, but at least annually, to ensure they are kept current, accurate, and complete.” ORCA is the Online Representations and Certifications Application (https://orca.bpn.gov) and serves as the repository of contractor qualification information.
What to do...
So, to ensure your firm is not penalized for performing on a contract under an outdated qualification, make sure you have updated your ORCA information within the past year (annual recertification is required at a minimum), or since any recent significant operational change.